Malloy Tax Department: More Liquor Sales Since Sunday Approved

Photo by Christopher P. Keating

The tax department of Gov. Dannel P. Malloy, shown above with House Majority Leader Joseph Aresimowicz of Berlin,released statistics showing that state alcohol sales have increased since Sunday sales began in May 2012.

The tax department of Gov. Dannel P. Malloy, shown above with House Majority Leader Joseph Aresimowicz of Berlin,released statistics showing that state alcohol sales have increased since Sunday sales began in May 2012. (Photo by Christopher P. Keating)

Under criticism from the state’s package stores, Gov. Dannel P. Malloy’s administration released figures showing that alcohol sales — despite what store owners say — have increased since Sunday sales were permitted in May 2012.

This year, Malloy is calling for increasing the number of hours when alcoholic beverages can be sold at package stores and supermarkets, a move he says would provide increased convenience for consumers and $3.3 million a year for the state in taxes.

The state package store association, however, is lobbying hard against the bill, saying the stores would suffer increased costs with the longer hours and no increase in revenue because the sales would be spread out over the nine extra hours weekly the stores would be open.

Malloy’s tax commissioner, Kevin B. Sullivan, wrote to top legislators on the finance committee this week reporting that major categories of alcohol sales — including beer, wine, and hard liquor — have increased in recent years.

Sullivan supports Malloy’s proposal, which includes expanding hours, increasing the number of package stores that a retailer can own, and changing the state’s complicated minimum pricing rule that Malloy says would lead to lower prices.

“Clearly, this is an area where arcane and anticompetitive regulation has little to do with the best interests of the marketplace or public safety,’’ Sullivan said.

In the first fiscal year after Sunday sales were approved, keg beer sales increased by 3.04 percent, while hard liquor was up by 2.91 percent and wine was up by 1.48 percent, state figures show.

In the most recent six-month period that ended in December, keg beer sales increased by nearly 6 percent, while hard liquor was up by 1.61 percent and wine had a tiny increase of 0.05 percent, he said.

“Some portion of increased sales is likely attributable to expanded days of operation,’’ Sullivan said.

But Carroll Hughes, the longtime chief lobbyist for the package store association, said that none of the increase could be attributed to Sunday sales because package stores file monthly reports and do not report the amount of sales on Sundays.

“We don’t supply him figures by the day,’’ Hughes said, referring to Sullivan. “He can’t say anything is up because of Sunday sales.’’

Hughes also disputed the sales increase, saying that Sunday sales have simply increased costs for retailers who are now open for seven hours on Sunday. The average retailer, he said, is now working 55 extra days per year — 52 Sundays and three holidays that had previously been prohibited.

“The sales have not been up,’’ Hughes said. “They’ve been spread out over seven days. Any retailer will tell you that.’

“It spread the business out over three days [from Friday through Sunday]. They reduced their help on Saturday and shifted it to Sunday. But there was no sales increase — none whatsoever.’’

Sullivan agreed with Hughes that sales are not reported specifically for Sunday, but he said that the numbers must be viewed in an overall context.

“During that period, what was different in the world?’’ Sullivan asked. “Let’s just look at volume overall. The answer is it went up. What’s different? One of the things that’s different is Sunday sales.’’

Sullivan noted that the keg beer sales are an important indicator because only package stores — not supermarkets — can sell kegs.

While Malloy says that Connecticut prices are higher because of the state’s minimum pricing provisions, Hughes countered that the real reason for the price differential is that Connecticut has the highest alcohol taxes in New England.

Hughes said that if the prices go down under Malloy’s plan, the state would collect less in sales tax because that is calculated based on the price of a bottle. Under that scenario, a standard bottle costing $30 would drop by $2 per bottle. If that happens, Hughes said the state would lose $4 million in sales tax in the same way that the state is currently receiving millions of dollars less than projected in gasoline taxes because prices have fallen at the pump.

“It is simply not reasonable or responsible to consider reducing taxes until prices are set in the marketplace, rather than fixed through government regulation,’’ Sullivan told legislators. “If and when Connecticut gets there, I would certainly welcome being part of a full and fair evaluation of tax burden.’’

Craig S. Turner, the former chairman of the Connecticut Coalition To Reduce Underage Drinking, questioned whether the proposal could lead to more teenage drinking as teens can “get it more easily because you’ve extended your hours’’ to 10 p.m. Monday through Saturday and 8 p.m. Sunday.

“Kids are very good at communicating to others where the weak links are,’’ Turner said. “Who is behind the counter? Who is checking IDs? … Alcohol is a very unusual commodity. It’s a legal product, but it’s a potentially dangerous product.’’